Why Switch to a Crypto Credit Card?
Cryptocurrency is the talk of the finance world. By offering greater speed, reduced transaction fees, and decentralization, cryptocurrencies are changing the dynamics of the financial sector. The interest of consumers in cryptocurrency is growing, with 20% of the population from some countries holding cryptocurrencies. Credit card companies are expanding in the crypto domain to explore its possibilities. This includes Visa, and Mastercard, which has partnered with leading cryptocurrency platforms to issue secure, compliant crypto credit cards to customers. These days more and more customers are interested in using crypto assets for payments. Visa reported that customers spent $1 billion worth of cryptocurrency globally on goods and services in the first six months of 2021. These cards are accepted anywhere the Visa or Mastercard are accepted, and they can be used for purchases just like the traditional credit cards. Like traditional credit cards, crypto credit cards also come with rewards on purchase. Still, instead of cash back or airline miles, the customer will earn Bitcoin or other cryptocurrencies, and the customer can redeem these earnings for cryptocurrencies.
Besides the crypto credit cards, merchants also issue crypto debit cards, allowing consumers to spend their cryptocurrency from their accounts. They are just like traditional debit cards, but instead of being backed up by your bank account, they are backed up by your crypto wallet. So, in order to use a crypto debit card, you must have cryptocurrency in your account. Both crypto credit and debit cards allow customers to earn rewards based on their day-to-day spending. The rewards depend on the credit card merchant. For example, with crypto credit cards backed by Visa, you can earn up to 4% in cryptocurrency of your choice. These cryptocurrencies have the potential to appreciate as compared to the traditional fiat currencies like the US dollar. Visa estimates the crypto-backed credit and debit cards can disrupt the $18 trillion cash and checks industry. We will help you decide whether a crypto credit card is a good option for you through this article.
Benefits of owning a crypto credit card
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With the cryptocurrency boom on the horizon, it might be a great time to get a crypto credit card. Now traditionally, people could hold, trade, and sell their cryptocurrency on various crypto platforms. However, they would need to convert their cryptocurrencies into fiat to buy goods and services. So, they were not able to use their cryptocurrencies directly without this conversion. Additionally, this conversion came with an exorbitant fee. Using a crypto-based credit card means you don’t have to pay this exorbitant conversion fee anymore. Besides that, banks usually charge fees for credit card services. With crypto credit cards, this fee is eliminated if your spending limit is within the threshold amount of that year.
Further, there is also no foreign exchange fee associated with crypto credit cards. Many crypto credit cards offer low or zero monthly transaction or activation fees. These crypto credit cards conveniently allow users to handle their crypto holdings by enabling fast, traceable, and efficient transactions.
The crypto credit rewards are quite appealing too. The customers get rewards in cryptocurrencies on their purchases instead of cashback (which is the case for a traditional credit card). While the cashback remains constant, crypto rewards might rise in value over time. If you get any product from the cashback, the product will eventually decrease in value. For services like flights or hotel bookings, you can’t resell it. On the other hand, if you get cryptocurrency in credit rewards, you would be able to resell it probably with far better profits. Besides this, many credit card users complain that they are not able to redeem their rewards in certain situations. For example, during the pandemic, when flights were not working, people could not redeem their airline miles for the entire year. With crypto rewards, people would not have to worry about their rewards being unredeemable in such situations. They can get cryptocurrencies which they can trade, sell and exchange at profits. This characteristic of the crypto credit rewards reduces customers’ reliance on their credit card providers and their terms/conditions, as cryptocurrency gives them complete control over their rewards. The customers can decide how and when to redeem it. However, it should be remembered that cryptocurrencies are volatile in nature and might not be the best for some looking for instant or short-term gains.
Whether you get a crypto credit card or not, it’s completely up to you, depending on your financial goals. If cryptocurrency is a part of your investment portfolio, crypto credit cards are a good way to spend cryptocurrency while earning rewards at the same time. However, you have to embrace the fact that the risk is a part of the game. For those who are already familiar with cryptocurrencies, expanding to crypto credit cards is a good idea. But since crypto cards are low risk, they might be good for beginners. You must take factors like rewards rate, annual fees, benefits of the card and compare it with other credit cards available in the market. If you use traditional credit cards and like cashback and air miles, you’d be giving them up for cryptocurrencies. If you get crypto credit cards, make sure that you practice good credit habits, i.e., pay your full balances every month; otherwise, you would end up paying more interest than crypto rewards.
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Several cryptocurrency platforms are partnering with payment merchants to help crypto enthusiasts improve their market experience. For example, Unbanked, which already offers various cryptocurrency-powered cards, partnered with Visa to introduce new crypto-friendly experiences. Unbanked equips customers with a more convenient, flexible way to buy, share and spend their cryptocurrency. Unbanked’s crypto debit card program also offers one of the highest reward rates in the industry, i.e., up to 6.38% back on user purchases. To know more about the crypto-related services Unbanked offers, visit our website today!